Obeid Was At The Heart Of ALP Power

If Eddie Obeid is corrupt, then so is the greater part of the ALP's factional system. That's why Kevin Rudd's tilt at reform will be so difficult, writes Ben Eltham

In his sadly under-appreciated novel from 2000, Last Drinks, Andrew McGahan created one of Australia's notable recent works of crime fiction. The novel's central character was a minister in the Bjelke-Peterson government called Marvin McNulty, closely modelled on Don Lane, the former Special Branch copper who went on to weave a web of corruption through the top levels of Queensland's government.

“Like the fall of Rome, the fall of Troy,” McNulty says in the novel. “Like we'd flown too high and challenged the gods. It started out so small, just a whisper, but someone lost their nerve, someone let it slip, and suddenly it was out.”

For Don Lane and his gang of thieves in the National Party, the moment it slipped was when Joh Bjelke-Peterson went on an overseas trip, and the deputy Premier Bill Gunn made the mistake of appointing a corruption commission led by the redoubtable Tony Fitzgerald. Fitzgerald and his investigators were able to get a Licensing Branch sergeant named Harry Burgess to roll over; Burgess spilled the beans on a chain of corruption that led all the way to the top.

For Eddie Obeid, the moment it slipped occurred when a tip-off to the Independent Commission Against Corruption led that agency to start probing an unpublicised New South Wales coal mining deal. ICAC started tapping phones. The rest was history.

The Commission turned up damning evidence that showed NSW Mining Minister Ian Macdonald had done a deal with the Obeid family to ensure they profited from a coal mining lease underneath a property they owned in the Bylong Valley. Macdonald drew up the tenement and made sure the Obeids secured it, shielding the decisison from cabinet and top public servants in his own department. The mining lease was later sold for millions to a consortium of rich-listers led by mining magnate Travers Duncan, called Cascade Coal.

ICAC tells a story of corporate malfeasance as well as political corruption. In the roaring bull market in coal prices of the late 2000s, coal leases were worth big dollars. Duncan stitched up a related party deal in which mid-cap listed company White Energy, of which he was the director, would buy Cascade. The owners of Cascade were also four of the directors of White Energy. The deal would have turned the initial $1 million coal lease into a $499 million profit. Amazingly, Travers Duncan is still the chairman of White Energy today, along with his partners in the Cascade deal, Brian Flannery and John Kinghorn. Memo to investors: get out now.

Of course, the real story of the ICAC findings is the byzantine levels of corruption and impropriety inside NSW Labor. Much has been written of the descent of the once-proud party in the state. Much more is to come.

Of course, some will argue that these lurid incidents overshadowed the good work that Labor did in office. Kimberley Ramplin makes a brave attempt at that today in The Guardian. But when there are this many bad apples, one does start to wonder at the quality of the tree.

In fact, the ICAC findings reveal precisely how far the corruption had penetrated. Eddie Obeid was no mere functionary in a minor position. He was a cabinet minister. He held important committee roles, including a deliciously ironic stint on the Standing Committee on Law and Justice.

More importantly, he controlled the ALP factional system in NSW. Through his unassailable position as the godfather of the “Terrigals” faction formed with Joe Tripodi, Obeid was able to command the loyalty of the greater part of the New South Wales Parliamentary Labor Party. With that power, he stacked branches, arranged preselections, worked committees, and rewarded favourites. He made and unmade premiers. He was, in a very real sense, running the state.

Obeid was not some rogue operator. He was at the very heart of Labor's system of power. His methods were indistinguishable from celebrated power brokers such as Graham Richardson – Obeid's former mentor. Obeid controlled the NSW Right faction. The NSW Right controlled the party, including federally.

If Eddie Obeid was corrupt, then the greater part of the Labor Party was too, because Obeid controlled it. It was Labor's factional system that allowed a man such as Obeid to seize control of the apparatus of state power, and use to enrich his family. As a result, many of Labor's most important figures remain implicated, including the foreign minister, Bob Carr. It was Carr who appointed Obeid to his first ministerial position, remember.

This explains why Kevin Rudd's tilt at Labor Party reform will be so difficult. Preventing another Obeid is tantamount to dismantling the factional system itself. And a Labor Party without factions seems almost unimaginable. The factional system permeates the entire party, all the way down to the grassroots.

As both Lord Acton and Elias Canetti have taught us, power has a way of transforming those who wield it. Even today, Obeid was in vintage form, truculently unloading on Labor colleagues. “I am a very respected person by all those that dealt with me,” he intoned. He will fight to the end.

Obeid does not appear ashamed of his actions. He doesn't even think he's done anything wrong. Perhaps in his own mind, he hasn't. In the Machiavellian world of Labor factional politics, the only values that matter are power, loyalty and mutual reward. We'll have to wait for a lengthy series of court cases to find out whether Obeid has broken any laws. But as far as the rules of the modern Labor Party are concerned, he played fair and true.

Discuss this article

This user is a New Matilda supporter.DrGideonPolyaPosted Thursday, August 1, 2013 - 16:18

Corruption, theft and mendacity have been entrenched in Australian society since the 1788 Invasion, the start of the Aboriginal Genocide and the Rum Corps. Here are some scandals that are far, far worse in my view than the coal crimes unearthed by ICAC.

1. History ignored yields history repeated. Armenian Genocide Day, 24 April, commemorates the death of 1.5 million Armenians who died in the Turkish-imposed Armenian Genocide that commenced on 24 April 1915, the day prior to the Anglo-French and Australian and New Zealand Army Corp (ANZAC) invasion of Turkey at Gallipoli in the Dardanelles on 25 April 1915. 25 April is marked as Anzac Day in Australia and New Zealand that commemorates the war dead of both these sister countries. Yet Australia resolutely ignores its causal connection to the Armenian Genocide and indeed to 23 other genocidal atrocities as a participant in past and continuing British and/or American wars (see Gideon Polya, “Australian Anzac & Armenian Genocide Australia’s secret genocide history”, MWC News, 25 April 2011: http://mwcnews.net/focus/analysis/10256-australian-anzac-a-armenian-genocide.html ).

3. The Australian Federal Government supports massive conventional natural gas and Coal Seam Gas (CSG) developments and has introduced a Carbon Tax to penalize fugitive emissions (gas leakage). However the endlessly dishonest Labor Government understates gas leakage as 0.12% (rather than the science-based estimates of 3-.3%-7.9% of gas produced) and under-estimates the Global Warming Potential (GWP) of methane (CH4, the bulk of natural gas) as 21 times that of carbon dioxide (CO2) (whereas it is actually 105 times worse than CO2 as a greenhouse gas (GHG) on a 20 year time frame and considering aerosol impacts). This leads to an immense Carbon Tax Scandal in which a pro-gas Labor Government understates the Carbon Tax obligations of the corporate gas producers by a factor of 137-329, collecting a mere $21 million annually rather than the science-indicated Carbon Tax obligation of about $3-7 billion each year from leakage of natural gas (fugitive emissions) (see Gideon Polya, “Australia’s climate tax scandal”, MWC News, 23 November 2012: http://mwcnews.net/focus/analysis/23026-gideonpolya-carbon-tax.html) .

Obeid does not appear ashamed of his actions. He doesn't even think he's done anything wrong. Perhaps in his own mind, he hasn't. In the Machiavellian world of Labor factional politics, the only values that matter are power, loyalty and mutual reward. We'll have to wait for a lengthy series of court cases to find out whether Obeid has broken any laws. But as far as the rules of the modern Labor Party are concerned, he played fair and true.

The ALP was created in the 1890s to be the parliamentary vehicle of the trade unions. A short time later the Country Party was set up to be the vehicle for the farmers and graziers. The UAP (which was rebadged in the 1940s as the Liberal Party) was for business small and large.

From the outset, the factional battles in the ALP were about keeping the politicians faithful to the platform and policy. With the decline in ALP branch and union membership came the possibility for what the sociologist Dean Jaensch called 'the Hawke-Keating hijack' in his book of the same name. The politicians have steadily won the battle for control of ALP policy and preselections. Rudd now behaves as if he owns the party, and he is hardly wrong about that.

For unionists, becoming an elected official was a way out of the factory and into a much easier life, which was why such elections were always well contested. The unions obeyed Michels' law: "Who speaks organisation speaks oligarchy". The ALP obeyed likewise. The oligarchic unions and the oligarchic ALP naturally became stamping grounds for operators like Craig Thomson, Eddie Obeid and Ian Macdonald.

Every attempt to break this cycle by forming a fresh party (eg Democrats, Greens) simply sees the process rerpeat. Each party becomes a federated collection of fiefdoms for its politicians.

see, none of us are ever 100% wrong or 100% right, thats why democracy is the preferred but flawed option.

The prefered option to date is the one prefered by the people with the money to corrupt.

Hence Religion, the MSM and the likes of the AWU and other processes.

At the end of the day their are only 3 basic forms of Power and a combination of those.

The Power of ONE, Nelson Mandella, Hitler, Churchill, Roosevelt etc.

The Power of the many, Nation States, Religion, Unions etc. etc.

The Power of Wealth, wealths ability to corrupt the rest because of Human Greed, Ego, Vanity, Survival.

Thats why we have always needed Rules, Regulations, Laws, some people just want their cake and eat it too, they;ll take it both ways as long as they win. Winners and Loosers, u can't have one without the other.

Obeid was an Economic Migrant, he had a corrupt mind before he came to the land of opportunity. The opportunity to corrupt. Look at our entire history, its been all about feathering nests, Corruption, the Rum corps and getting rid of the Blighs, the Rudds, Whitlam's, Lang's.

Have a look at the history of the Harbour Bridge and why that little Grub in his Shitty Green Uniform, DeGroot rode onto the Harbour Bridge to cut the ribbon instead of Lang.

It was another Bligh/Rum Corp moment in Australia's Rip Off history.

We only wasted almost our entire Gene Pool so that our Koala's, the Landed Gentry could remain the 3rd richest, I mean how much Rum Corp stupidity was that. But what happened.

Ameica happened, England got killed in the X fire and so did Aussie. OH Dear.

Maybe next time girls.

Then BP ripped us OFF for years, so that England could rebuild its Glory at our expense..

Good article Ben and I support O. Puhleez's comments. Of course the rule of Robert Askin in NSW was another corrupt saga. Every organisation including government is always subject to the threat of being corrupted or ripped-off by people in positions of trust. It's a sad fact of human nature. NSW seems to exchange one lot of bandits for another. Whilst the rest of us are not immune it seems there is 'something in the water in that State'. Your central theme about the ALP factions is spot on. I know long standing ALP members who no longer attend branch meetings because in their view those meetings are a waste of time. They say that all the 'powers that be' want is bodies to distribute how to vote cards at elections. The ALP is like a hollowed out tree and I suspect (having recently been offered membership of the Liberal party by email) that the Liberals aren't travelling too well either. Perhaps it's just the apathy most of us have regarding politics that's the problem. Of course that apathy is not confined to Australia. I think we've had it so good for so long that most of us have dozed off to sleep. Sadly there is bound to be a rude awakening.

The German/European Monarchy, the Aristocrats. The entire Westminster system to date has done nothing but support people who are every bit as bad as the Obeids.

Australia is a Nation of Wanabee's, Elites, Koala's. we are a much bigger version of East Timor and a Nation where the Portugese imports do what the Obeid's do and did.

Australia is merely a bigger East Timor because we have something to export, take away our Coal Export and there isn't much left and we'd be back to our Landed Gentry/Endangered Species selling food to England as a means of getting rich.

Look at our entire History, Rum rebelions, just as the Portugese control East Timors economy for their survival at the expense of the indiginous people so do our Endangered species control this countries resources to line their pockets, why do u think we went into East Timor, certainly not because we give a shit about the indiginous people. Some greedy Obeid grub here want the gas fields of the east timor coast Al Takiri wasn't going to give it to us, so we got involved in their struggle to control their nations wealth and we proped up the Portugese/Obeidy arses.

Thats the problem with being a bunch of knobs who don't even understand, don't want to understand, are willfully ignorant about why we even had WW2, why Australia's history is saturated with 15 wars worth of blood, our own childrens but mostly others.

We are a bunch of Lackeys for people with the Characters like the Obeids.

Our minning Industry just spent or waste 20 million to get rid of a PM, because they don't like the Minning Tax, why, their a bunch of Obeids.

What is it that passes u people by, we are a Nation of greedy grubs, we all came here because of it. The Obeid Character is what populated this Nation. It was/is the Nation of opportunity, a Nation of Rum Rebelions, if u know how to use the SYSTEM and the Obeid's knew, take/took it.

Do u think the Libs are any different, look at Peter Reith and his Bowler Hated Son in England walking around as if he is an Australian Royal, with Daddies Phone Card.

AWB scandal, Australia is a Nation of Scandals, our imigration Policies are and have been a scandal.

Are we blind or just willfully ignorant., We are part of England one of the most Corrupt and Indangered Species Nations on the planet. What do we, did we expect.